A surge in the price of oil sent energy companies higher Friday, but U.S. stocks got only a small boost overall as retailers suffered big losses.
Stocks rose in morning trading as oil prices climbed, and the Dow Jones industrial average jumped more than 150 points early on. Retailers skidded as investors worried about reports from Gap and L Brands. Biotech drugmakers returned some of their gains from earlier in the week.
Oil prices climbed about 7% this week as the dollar got weaker. The price of oil has seesawed as investors hope energy producing companies will cut production. Experts aren't sure the gains will last.
"If this fizzles out in a week or so I think you could see oil prices roll over," said Steve Chiavarone, associated portfolio manager for Federated Investors.
The Dow picked up 35 points, or 0.2%, to 17,576.96. The Standard & Poor's 500 index rose 5.69 points, or 0.3%, to 2,047.60. The Nasdaq composite index eked out a gain of 2.32 points, or less than 0.1%, to 4,850.69.
Benchmark U.S. crude leaped $2.46, or 6.6%, to $39.72 a barrel in New York. Brent crude, used to price international oils, rose $2.51, or 6.4%, to $41.94 a barrel in London.
ConocoPhillips rose 2.3% to $41.23 and Murphy Oil advanced 5.1% to $25.69.
Oil prices recovered this week, and Chiavarone said that's partly because the Federal Reserve is emphasizing that it will raise interest rates slowly. That makes the dollar weaker, and investors think that means demand for oil will go up.
Gap said all three of its major chains saw their sales drop in March, and added that levels of product inventory are high, which could lead to bigger discounts that will hurt its profits. Meanwhile L Brands said it will restructure its Victoria's Secret brand and eliminate about 200 corporate jobs.
Gap shares plunged 13.8% to $23.85 and L Brands stock fell 4.3% to $80.50. The companies' statements and their losses hurt firms that sell everything from athletic apparel to handbags to watches, as well as department store chains. Macy's slid 2.3% to $39.68. Under Armour fell 2% to $43.54.
Analyst Simeon Siegel of Nomura Securities said that L Brands and San Francisco-based Gap each reported decent sales, and that their problems don't suggest big trouble for retailers in general.
"Everything gets lumped in together," he said. He added that retail stocks have made big gains recently. "For the past few weeks we've had this incredible rally that really wasn't predicated on any results," he said.
Pain drug maker Depomed rose after activist investment firm Starboard Value disclosed a 9.8% stake in the Newark, Calif.-based company, making it one of Depomed's largest shareholders. Last year Horizon Pharma tried to buy Depomed for about $1.1 billion, or $33 per share, but Depomed fended off that effort and Horizon dropped it in November. Depomed's stock jumped 13% to $16.95.
Biotech drugmakers retreated. Regeneron Pharmaceuticals sank 3.2% to $404.94 and Biogen slipped 0.8% to $270.83.
Specialty glass maker Corning said it will buy optical components maker Alliance Fiber Optic Products for $18.50 per share, or $305 million. Alliance stock surged 19.3% to $18.45. Corning slipped 13 cents to $20.53.
Ruby Tuesday tumbled 11.9% to $4.60. The restaurant chain's earnings were disappointing and it cut its forecasts. The company also said its chief financial officer will leave to take a job with another company.
Gold rose $6.30 to $1,242.50 an ounce. Silver rose 23 cents, or 1.5%, to $15.38 an ounce. Copper rose 1 cent to $2.02 a pound.
Energy prices rallied in late February and March as investors hoped that major oil-producing nations will agree to freeze production levels in mid-April. But Chiavarone said they may be disappointed, and if a deal doesn't emerge, he thinks oil prices could fall back to around $30 a barrel.
In other energy trading, wholesale gasoline rose 8 cents, or 6%, to $1.46 a gallon. Heating oil jumped 7 cents, or 6.6%, to $1.20 a gallon. Natural gas slipped 3 cents to $1.99 per 1,000 cubic feet.
The yield on the 10-year Treasury note rose to 1.72% from 1.69%. The dollar rose to 108.33 yen from 108.24 yen. The euro inched up to $1.1397 from $1.1377.